*Warns against misuse of subsidy removal accruals
The Nigeria Exchange Group (NGX) has urged both government and private concerns to take advantage of the many opportunities in the capital market to raise the needed funds to strengthen and expand their businesses and reposition the national economy.
NGX Group Managing Director/Chief Executive Officer, Mr. Oscar Onyema, as keynote speaker at the CityBusinessNews Summit and Awards 2023, in Lagos stated that “investing in the capital market gives the nation an opportunity to unlock new avenues for economic growth and development.”
While noting that many businesses, especially small and upcoming ones, were still recovering from the tremendous economic shifts of Covid-19 and the Russia-Ukraine war, he disclosed, however, that so far this year, NGX Limited has raised over N4.7 trillion in FGN bonds for the national and over N137 billion for the sub-nations.
Onyema, who was represented by the Group Chief Investment Officer NGX, Mr. Tony Idugboe, was optimistic about the nation’s economic recovery in spite of the current challenges from the removal of petroleum subsidy and foreign exchange liberalisation, which have spiked and sustained inflation.
Taking a capital market perspective on the theme of the summit, “Repositioning Nigerian Economy: 2023 And Beyond,” he stated that Nigeria, being an industrious country, keeps thriving in the face of adversity to ensure the rebirth of a new economy.
He aligned with the Nigeria Development Update (NDU), which considers the current government’s removal of fuel subsidy and reforms in FX market crucial to rebuilding fiscal space and restoring macroeconomic stability, which will lift Nigeria’s growth potential.
However, he warned that though the economy is expected to grow at 3.3 per cent in 2023, 3.7 per cent in 2024 and 4.1 per cent in 2025, “the effect of the fuel subsidy removal, if not well managed, could expose lots of citizens to absolute poverty and lack of social amenities.”
According to Onyema, “the inflation rate is expected to be higher in 2023 and lower in subsequent years. High inflation and low fiscal revenues continue to hinder economic growth and possible investments.
“The economic situation gives rise to the need to explore other options of generating revenue and attracting investors, both locally and internationally. One of the key areas that could boost the economy and create enormous opportunities for investors is the capital market.
“Capital market serves as a platform for government and businesses to access funds from a broad range of investors, enabling them to expand, innovate and create new job opportunities.”
This is done through “a wide range of funding instruments, innovators, creators and investors benefit from more financing alternatives, including equity, debt and private market.”
He explained that “in the coming years, capital markets will play an even bigger role by facilitating the mobilisation of more private capital into key sectors such as energy, infrastructure, housing, Small Medium Enterprise (SMEs) and sustainable finance.”
